CAMERA retailer Jessops emerged as an unexpected casualty of the retail slowdown today after it warned of a sharp dip in profits this year.

Jessops said sales of digital cameras were "considerably below" management expectations in February and March as shoppers stayed away from the UK high street.

Its trading troubles were compounded by the impact of rival retailers cutting the prices of cameras and accessories in an effort to clear stock.

Like-for-like sales, which had grown 6.2 per cent in December, were now expected to be only 1 per cent ahead at the half-year stage.

The market slowdown also harmed those Jessops stores that opened over the past year and the company said total sales would be around 4.4 per cent higher in the six months to March 31.

Jessops said: "In this more challenging trading environment, the board believes it is prudent to revise its sales growth and margin expectations for the second half.

"Therefore the outcome for the year as a whole is likely to be significantly below its previous expectations and below last year."

Earnings

Jessops, which has more than 270 stores, reported underlying annual earnings of é19.5 million and sales of é319 million in December - its first set of results as a listed company.

In its trading statement today, the company reassured investors that it was holding its share of the digital market and forecast an improvement in like-for-like sales from April.

Shoppers should be tempted back into stores by new products and an increased take-up of single lens reflex (SLR) cameras, which are more versatile than snapshot or point-and-shoot versions, Jessops said.

The plight of retailers since Christmas was highlighted by data from the Office for National Statistics (ONS) this month which pointed to retail sales growth of just 0.2 per cent in February.

The ONS said the volume of retail sales in the three months between December and February fell by 0.6 per cent against the previous quarter - the weakest performance since the Iraq war nearly two years ago.

Health and beauty chain Boots has already guided the market towards lower profits and analysts believe the next eight weeks will bring further disappointment from the high street when the retail results season begins.